SCMA

Week of June 3, 2002

SCMA celebrates a century

New officers of the South Carolina Manufacturers Alliance, elected during its 100th annual meeting recently, include (L-R) Paul G. Campbell Jr., executive vice president of Alcoa Mt. Holly, first vice chairman; Mark B. Kent, president of The Kent Manufacturing Co., chairman; H. Malloy Evans, president of Cheraw Yarn Mills, second vice chairman; and David Hastings, chief financial officer of Mount Vernon Mills, treasurer.

Photo by Devin Steele

By Devin Steele

SEA ISLAND, GA  Against a familiar backdrop of brackish marshes and terra cotta tiles, members of the South Carolina Manufacturers Alliance (SCMA) recently stepped into uncharted territory.

The group, holding its annual meeting at The Cloister for the 51st consecutive year, reflected on a century of existence and set a course for the next 100 years.

During the commemorative meeting, members heard a number of distinguished speakers; watched special videotaped messages from lawmakers and others who have played a role in defining the organization in its first century; instituted a new award; elected officers; and welcomed special guests, including several past presidents and executive vice presidents of the group.

South Carolina has been a strong manufacturing state for the past 100 years and we need to continue to be for the next 100 years, SC Gov. James Hodges told delegates.

Former Gov. Carroll A. Campbell was presented the inaugural Tribute to a Statesmen Award, which will bear his name, for his work on behalf of manufacturing in the state.

Outgoing President E. Smyth McKissick, president of textile-manufacturer Alice Manufacturing, Easley, SC, reviewed accomplishments of the group during the past year and outlined some of the problems that have led to manufacturing job losses, particularly the textile industry, in recent years. Most notably, he pointed out that Washington leaders have provided unequal access to U.S. markets through various trade deals and allowed foreign competitors to use currency devaluations to facilitate the dumping of low-cost goods into the U.S. market.

We are not losing jobs to competitors that have a comparative advantage, but rather an unfair advantage, he said.

McKissick also noted that the United States strong-dollar policy has been a major factor in causing manufactured goods exports to fall $140 billion dollars. He urged members to become actively involved in helping to combat these problems.

We must continue to vigorously pursue relief at the federal level through our state and national trade organizations, he said. I would encourage you to write the president, the treasury secretary and your congressmen and senators. Let them know how these trade policies affect your business. Let them know that the jobs in your plant are critically important and are worth saving.

McKissick was succeeded by Mark B. Kent, president of The Kent Manufacturing Co., Pickens, SC, who assumes the new title of chairman. In his acceptance address, he named three qualities necessary to advance manufacturing and the Alliance: education, participation and cooperation. He explained his approach to each quality.

We will continue to educate ourselves and the General Assembly with an initiative established by Smyth McKissick, he said. Last year, we opened our plants doors to legislators, and we will continue to offer this opportunity to exchange information. This initiative will allow both parties to learn more about each other and together, we can work toward creating a more progressive state.

He then specified the need for manufacturers to work closely with colleges and the technical college system to further their programs and curriculum.

Our industry is evolving and growing and we need our educational institutions to produce high-caliber graduates who can run our plants, Kent said. Properly trained and educated men and women joining our work forces want to be assured high-paying jobs and opportunities.

Lets not waste the states time and money on retraining costs. Lets do it right the first time.

He also called on members to become more involved in the organization.

We need to increase our presence throughout the state, he said. We need to let our voices be heard and our faces be seen. I want us to meet with members of the General Assembly, the governor and his administration and the other members of state government. We are blessed with a wealth of knowledge and talent within this organization. Lets share our concerns and advice with decision makers.

In closing, Kent cautioned state leaders to wisely move forward with expansion of the South Carolina port in Charleston.

If we fail to expand our port, our citizens and manufacturers will suffer the cost of severe, long-lasting economic damages, he said.

In other elections, Paul G. Campbell Jr., executive vice president of Alcoa Mt. Holly, was elected first vice chairman; H. Malloy Evans, president of Cheraw Yarn Mills, was tapped second vice chairman; David Hastings, chief financial officer of Mount Vernon Mills, was named treasurer; Robert E. Barnett, director of operations for Honeywell, was named chairman of the Chemistry Council; and David Johnson, director of manufacturing for Highland Industries, was elected to chair the Textile Council.

Pillowtex emerges

Week of June 3, 2002

Leaner company out of Chapter 11

Taken together, our goal is to be the industry leader in customer service, said Tony Williams, president and chief operating officer, as his company announced Tuesday that it had emerged from Chapter 11 bankruptcy court protection after satisfying all conditions of its plan of reorganization. With the reorganization behind us, we are now in a position to focus our full attention to meet that goal and do so with a much improved balance sheet.

Pillowtex surfaced as a much leaner entity, having eliminated about 4,500 jobs to bring its current employment roll to about 8,300. It also carries a much lighter debt load.

The company, with a nearly all-new board of directors, also said it plans to change its name this summer.

The reorganization process provided an opportunity for our company to restructure to meet the current needs of the home fashions market more effectively, Williams said. The benchmarks we have set for success are clear  strong brand marketing, more effective employment of our manufacturing capacity, the development of strategic sourcing partnerships and a fanatical focus on quality.

The company has reduced its debt from $1.1 billion prior to filing the bankruptcy petition to about $205 million.

The companys emergence is financed by a $112 million term loan, and a $200 million syndicated revolving credit facility provided by Congress Financial Corporation, as agent, said Mike Harmon, CFO.

The company now has about $100 million of availability under the revolving credit facility, he added.

Under terms of its reorganization plan, all shares of Pillowtexs existing common stock and preferred stock will be canceled. The company will issue new common stock to its secured creditors and a combination of new common stock and warrants to its unsecured creditors, in accordance with the distribution procedures provided in the plan.

In November 2000, the company filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

A few days earlier, Charles M. Hansen Jr. resigned as chairman and CEO. Ralph LaRovere, a longtime J.C. Penney Co. executive, replaced Hansen as chairman, and the company has sought a chief executive officer since then.

In 1997, Pillowtex, then based in Dallas, acquired Kannapolis-based Fieldcrest Cannon for $700 million. Ensuing computer-conversion woes and a slowing retail environment hurt the company as it sought to whittle away at its debt.

Trade bill

Week of June 3, 2002

Trade bill gets nod in Senate

WASHINGTON  Trade promotion authority (TPA) for President Bush and renewal of the Andean Trade Preferences Act grew closer to reality on May 23 as the Senate passed a trade bill that could have a major impact on the U.S. textile industry.

The legislation, which passed by a 66-30 vote after three weeks of debate, awaits deliberation in a conference committee, where hard bargaining over several divisive issues is expected.

TPA, or fast track, gives the president the power to negotiate trade deals with other countries, with no amendments allowed by Congress. Bush has pushed for this authority, which lapsed in 1994, in order to improve the United States power in World Trade Organization talks and in the establishment of a free-trade zone in the Western Hemisphere.

Bush said that TPA will give me the flexibility I need to secure the greatest possible trade opportunities for American workers, consumers, families and farmers.

Opponents in the textile trade argue that the last time a president had this authority, the North American Free Trade Agreement (NAFTA) was passed, which they blame for causing hundreds of thousands of job losses.

The House passed TPA by one vote in December, as several textile-state lawmakers voted for the measure after being given a list of administration promises designed to assist the beleaguered industry.

Included in the Senate bill was the Andean pact, which grants tariff concessions for five years to Bolivia, Colombia, Ecuador and Peru. That legislation is generally opposed by many in the domestic textile industry, including the American Textile Manufacturers Institute (ATMI) and the American Textile Trade Action Coalition (ATTAC), the new lobbying coalition made up of textile manufacturers and union members.

The legislation also included an amendment by Sen. John Edwards (D-NC) that helps employees and communities hurt by unfair trade practices and directs U.S. trade negotiators to seek fairer trade conditions for textiles and apparel. Provisions in the amendment, which passed 65-33, would extend trade adjustment assistance for six more months for displaced workers while they participate in retraining programs and would provide emergency grants for community colleges that serve areas affected by plant shutdowns to retrain employees.

We have made real progress toward helping workers and revitalizing North Carolina communities, said Edwards, who holds an undergraduate degree in textiles from N.C. State University. I will continue to fight for people like the ones I grew up with in North Carolina.

One sticking point in House-Senate negotiations could be the trade adjustment assistance provision, which under the Edwards amendment extends income assistance from 78 weeks to 104 weeks.

Another point of contention is the Dayton-Craig amendment, which would allow lawmakers to veto provisions in trade agreements that weakens U.S. laws on anti-dumping and subsidies. The White House has threatened to veto a bill containing that language.

We do have a few barnacles on this that Im sure will be sheared off in conference, said Trent Lott (R-MS), the Senate Republican leader, as quoted by The Associated Press.

Related to the Andean pact, an issue to be hashed out is related to apparel imports into the U.S. Both the House and Senate versions would provide duty-free access for apparel made from U.S. yarn and fabric. The House bill, however, provides a larger cap on apparel made from regional fabric and more liberally defines the yarn requirements for qualifying apparel.

That means that apparel made from U.S. and regional yarn would fit under the regional cap, while the Senate version stipulates that apparel made only from U.S. yarn would qualify for duty breaks.

The House bill would also double current quotas from African and Caribbean countries on T-shirts and knit apparel made from regional fabric under the Trade Development Act of 2000.

Sen. Ernest F. Hollings (D-SC) criticized the ramifications of the bill after voting against it.

There never has been any such thing as free trade, and never will be, he said, as quoted by The Los Angeles Times. Its like world peace ... it wont happen in my lifetime.

Trade bill

Week of June 3, 2002

Exhibitor: Idea-peddlers temper doom and gloomers

By Devin Steele

TECHTEXTIL Part 4

ATLANTA  A representative of KoSa, one of the worlds largest polyester producers, reported a mixed bag of visitors to his companys booth during the recent TechTextil North America trade show at the Cobb Galleria Centre here.

We are relatively pleased with attendance, given the current state of the economy, said Larry Williams, global business director, technical filament, Charlotte, NC. I believe the attendance is somewhat lighter than the show two years ago and the mood of the population here is perhaps not as upbeat. However, a lot has happened in two years.

I will say that, for every individual who walks by with isnt it bad? and its all over, its doom and gloom, theres another individual who walks by looking for an idea or selling an idea or producing an idea.

Attendance at the event, which showcased technical textiles, was actually about the same as during its inaugural run in 2000. Regardless, KoSas presence was imperative, Williams said.

Even as many of our products and services have become globalized, become commoditized, we still feel this is a market for innovation and that there are more good days to come in the industrial textiles marketplace, he said.

One of the highlights of Williams spiel to visitors was the message that KoSa has invested heavily on this side of the industry, most notably pouring $80 million into its Salisbury, NC, facility. Completed in December 2001, the project included the installation of four spinning machines for filament polyester that have a capacity of about 16,000 tons.

We believe we have the most modern, state-of-the-art asset for technical filament textiles in the world, he said. And what were trying to get across to people who may not know us as well as our current customer base is the commitment that we have made to this industry, which I believe signifies our commitment to be a long-term, major player.

Meanwhile, Robert Casciani, Ph.D, who works in technical marketing and business development for Clariant Corp., Charlotte, NC, also said he was pleased with traffic in his firms booth, particularly among non-traditional customers.

Its been an excellent show for us, he said. This is the first time weve exhibited here and Im pleased to see such a large group of attendees. There is a lot of talk about the new technologies and a lot of excitement about the types of products being offered.

Among innovations Clariant showcased were antimicrobial products, based on silver technology. Its Sanitized® Silver additives provide a permanent, antimicrobial protective finish on polyester and polyamide, as well as on cast and injection-molded plastic articles, Casciani said.

Scott Ayers, director of sales and marketing for Gem Urethane Corp., Amsterdam, NY, said the quality of the leads generated at the show was better than the quantity. He offered visitors information about two technologies in which his company, a high-tech laminator and a subsidiary of Fab Industries, is involved.

There are lots of laminators, but were very special in that we have two very good technologies. One is ultrasonics, in which were really a pioneer and somewhat of a world leader because we have the most up-to-date, state-of-the-art equipment, we have the widest width and we have very good technology and expertise in-house.

The other technology is a hot-melt adhesive, which, without full-face adhesion, provides for more breathability and a softer hand, Ayers said.

We have capacity and we have the ability to be flexible in terms of our sourcing, customer sourcing, storing raw materials, storing finished goods. So we have a lot to offer.

Lacent Technologies, Inc. of Edmonton, Canada, showcased its latest laser-cutting systems for textiles. With U.S. offices here, its customers include manufacturers in the automotive, apparel and industrial textile industries worldwide.

Corey Smith, marketing manager for Lacent, also advanced the quality over quantity mantra.

We find that the quality of attendees is very high here, he said. Theyre well-informed and they understand the benefits of laser cutting. There are some technical people here, as opposed to other shows that we go to. So were very happy with the quality of the visitor. And, hopefully, as the show grows, the quantity will increase, as well.

Among visitors, Wendy Horowitz, marketing representative of Offray Specialty Narrow Fabric, Chester, NJ, took a break from strolling the aisles to offer her take on the event.

The show has been very good, she said. There is a lot of technical information that I havent seen at trade shows in the U.S. before. The international scope of the show has been very helpful, also, to know whats happening worldwide.

Textile club

Week of June 3, 2002

Information crucial, says Alkahn exec.

ATLANTA  In a spirited, interesting and interactive talk, Royce McInnis, vice president of sales for Alkahn Label, addressed members of the Atlanta Textile Club (ATC) here recently.

Alkahn Label turns 100 years old next year. With operations in the U.S., Mexico, Hong Kong, India and Turkey, Alkahn is a global trim supplier. It produces more than 10 million labels a day, meaning that its customers sew that many garments a day.

In the mid-80s, we decided to target retailers, McInnis said. Back then, a customer might order 2 million labels over a six-month window. Today, it has become a boutique industry, where they might order 20,000 labels or even less each order  and they order more frequently. Tracking orders this small, on a 10-million label day, is like finding a needle in a haystack.

Alkahn is one of the top three producers of woven labels in the world. The majority of what it weaves in the U.S. and all of that in Mexico is shipped to Mexico or the Caribbean.

In todays industry, it is not the product you make that differentiates you, it is the information you provide the customer, McInnis said.

Therefore, he added, Alkahn is pioneering an Internet-based ordering and tracking system with a number of brand name customers.

Royce gave us a completely different view of sourcing and a case study on what trim suppliers are doing in todays globalization, said ATC President Mike Todaro of AAPNetwork.

TRADE SHOW SEMINAR

Week of June 3, 2002

Megatex trade show concept advanced

PART 3:

TODAYS FOCUS: MEGATEX 2006

By Devin Steele

CHARLOTTE, NC  The Megatex trade show idea was advanced by organizers during a recent Trade Show Seminar sponsored by the American Textile Machinery Association (ATMA) here.

Speaking publicly about the concept for the first time since it was announced in February, representatives of Mack Brooks Exhibitions (MBE) offered further details about the show, which will bring together several exhibitions at the same venue in 2006.

Two anchor association exhibitions  the American Textile Machinery Exhibition-International (ATME-I) and the Annual Exposition of Industrial Fabrics Association International (IFAI Expo)  have committed to co-locate at the Georgia World Congress Center in Atlanta. Organizers said they are in discussions with other textile-related groups about co-locating their trade shows there, as well.

Our endeavor is to bring in as many interested parties, with as many vested interests as we can, in order to make the show in 2006 and beyond the biggest possible spectacle, said Stephen Brooks, CEO of UK-based MBE.

Mack Brooks Exhibitions, an international trade show organizer, is teaming up with ATMA and the Association & Society Management International, Inc. (ASMI) to organize, produce and promote ATME-I after 2004. Textile Hall Corp., co-sponsors of the 2004 ATME-I in Greenville, SC, is also involved in organizing the 2006 event, scheduled for Oct. 31-Nov. 1.

Kevin Tighe, director of sales for MBE, told seminar attendees that co-locating exhibitions addresses a common industry complaint  that there are too many shows  and will benefit all parties.

Were going to use economies of scale, said Tighe, who is based in the companys U.S. offices in Atlanta and Point Pleasant Beach, NJ. By having one event, visitors may say, I cant go to nine shows. But maybe I can go to this one great big event. That will be much easier. Its also easier for the exhibitors by helping their budgets.

Though MBE organizes trade shows for a number of industries, this will mark its first foray into textiles. For that reason, Brooks called himself an outsider, to some degree who brings a different perspective to the economic crisis in U.S. textiles.

The thing we observed immediately, particularly in the U.S., was a great sense of doom and gloom, a great sense that things arent what they used to be, he said, and they sure as hell arent.

But that fact doesnt dampen his optimism that a textile-related show in America wont be successful four years from now, he added.

The big story is that a lot of whats happening is about moving production to cheaper labor abroad, Brooks said. Thats not unique to the U.S., of course. Thats going on all over the world, certainly in Europe. But in trade show terms, none of that need matter. The U.S. has the biggest exhibition facilities in the world. It has the most significant facilities, in exhibition terms. Its also a huge mag- net for people throughout the world, including South and Central America, as a destination.

And the textile industry is still a massive industry here and, sure, things have been tough over the last few years, but Im looking forward to some sort of stabilization. And its going to stabilize, theres no question about that. The question is what follows.

Organizers chose Atlanta for the co-located event for a number of reasons, Tighe said, including its close proximity to most textile manufacturers and suppliers in the U.S., its major international airport, its top 10 ranking among expo cities in the world, its 88,000 hotel rooms and the existence of the World Congress Center. And, he added, the 1.65 million-square-foot facility will be renovated by the time the show rolls around.

Co-locating various exhibitions will not cause problems as far as associations competing for business, but instead will have the opposite effect, Tighe said.

A lot of people have asked, how are you going to co-locate and what about this show and our show and your show?  But look at is as a mall. All the stores co-locate within that mall. You can go to a department store, a clothing store, a bicycle shop. Theyre all selling different products but they all want to draw the buyer in.

And thats exactly what were hoping to do by co-locating these events  draw in the buyers. They may supply something in your industry, but theyre really associated with this other association. So its like broadening the field and perhaps helping all exhibitors find new customers.

Visit www.textilenews.com for more news from the seminar.

Briefs

Week of June 3, 2002

Arrow/SI to close N. Carolina plant

ASHEBORO, NC  Arrow/SI, Inc., which is a part of HIT Industries Saxonia International Group, said it will cease manufacturing at its facility here on June 28.
Saxonia International is the principle manufacturer of component guide needles and sinker blades for Karl Mayer, Liba and other warp knitting machine manufacturers worldwide.

In the future, Arrow/SI said it will produce casted knitting elements for warp knitting equipment other than Karl Mayer at the SI factory in Malaysia. Knitting elements for Mayer equipment will be outsourced.

Arrow/SI is also the distributor of Arrow sinkers for circular and flat knitting machines, Leistner pin plates and Gutmann brush wheels for tenter frames. Saxonia International has seven manufacturing and distribution sites worldwide.

Arrow/SI will retain a sales office and inventory here.

Guilford Mills seeks to sell garment biz

GREENSBORO, NC  Guilford Mills, which is operating under Chapter 11 bankruptcy protection, is seeking to sell its interest in garment-making business.

The company has asked a federal bankruptcy judge for permission to sell its interest in Unger Fabrik for $2.1 million, according to The Greensboro News & Record.

Guilford, shifting its focus on automotive fabrics only, bought half of Unger Fabrik in 1998 for $3.7 million and subsequently invested $14.9 million into the partnership. The company wants to sell its share of the Unger Fabrik to Fabian Oberfeld and Richard Sneider, who own the other half of the company.

Under the proposal, Guilford also would get Unger Fabriks manufacturing plant in Mexico.

Unger Fabric makes swimwear, intimate apparel and other garments.

Unifi, Inc. forms Hong Kong subsidiary

GREENSBORO, NC  Unifi, Inc. said it has formed a sales and marketing subsidiary in Hong Kong.

The new entity, known as Unifi Asia Ltd., will allow the company to better service its worldwide customer base and capitalize on growth opportunities that exist in the region, the company said.

Heading up the new entity is John Walker, who joins the company as president of Unifi Asia Ltd. Walker, who was most recently a director at the apparel trading company Li & Fung Ltd. in Hong Kong, brings more than 40 years of global textile and apparel experience to Unifi.

He also served as president of the diversified products division of Collins and Aikman here, president of the international division of Fieldcrest Cannon, Inc. in Kannapolis, NC, and president of PT Yasinta Poly in Jakarta, Indonesia.

Brian Moore will serve as vice president of Unifi Asia Ltd. He joined Unifi in March of 1993 and most recently served as the director of the companys Six Sigma program.

Editorial

Week of May 27, 2002

Textiles R Us?

FOR AN INDUSTRY that lacks much good news these days, one slipped in last week: Pillowtex emerged from Chapter 11 bankruptcy protection. After 18 agonizing months of operating under the shelter of the courts, the home fashions behemoth fluttered its wings and came to life, metamorphosed as a leaner and, perhaps, meaner entity.

One of the most compelling aspects of Pillowtexs announcement was this nugget: That it will change its name in the coming weeks. Which certainly gets the wheels turning here at Textile News Central. Wouldnt you like to be a Pillowtex board member or senior manager during an executive brainstorming session these days? How often in a lifetime do you get the chance to name a company, particularly a major player in its field? Imagine ...

Chairman Weaver: This meeting is called to order. Today, our only task is to come up with a new name for the company. Anybody have any ideas?

Beddy Boop: Well, weve shed hundreds of millions of dollars in debt and downsized to only a shadow or our former selves, so why not go with something like Pillowtex Lite? 

Fit Ted Sheets: Or Fat-Free Pillowtex? 

Wett Blankette: The idea is to come up with a new name, not a variation of an old name. Try again.

Beddy Boop: You certainly live up to your name, dont you? Well ... how about Vanilla-Tex? You know, like the new Coke.

Chairman Weaver: I think we need to shy away from all the references to diet or food. Besides, its too close to lunch time.

Matt R.S. Padd: Ooo, ooo, I know, I know: Pillowcaro. The company is no longer based in Texas, but right here in North Carolina. So lets drop the tex and go with caro. Has a nice ring, huh?

Towe L. Awf: Yeah, sounds like nap time in the car.

Matt R.S. Padd: Well, lets see you do better, Mr. Name That Firm.

Towe L. Awf: OK ... lets see ... isnt Boll Weevils available since that local minor league baseball team changed its name? Thats it  Boll Weevils, Inc. 

Wett Blankette: Yeah, name it after a bug known for eating our natural fibers, our very lifeblood. And our motto could be Un-Boll-Weavable. That would go over well.

Sam the Sham: Cant we draw from something thats hot? Like Survivor, Inc.  we are survivors, you know. Or Spiderman Weavers? Or how about The Osbournes Corp., just to show how hip we are with the MTV generation? Anything associated with Ozzy sells like hotcakes these days.

Fit Ted Sheets: Arent we indebted to our lenders? Why not go with something like Thanks, Banks, Inc. or Banks A Lot Corp.?

Beddy Boop: Or Looms & Loops. 

Towe L. Awf: No, Loopdy Loops. 

John Linen: How about Bloomin Looms 

Chairman Weaver: One more silly play on words and Im going to call this meeting adjourned. This is serious business here, folks. And my stomach is growling.

Sam the Sham: OK, lets get serious. To remember our heritage, why not do a variation on our past names, Pillowtex, Fieldcrest and Cannon? Like maybe Pifican, Inc. Or Capifi, Inc. 

Beddy Boop: Too obscure. We could do the letters, though: FCP or PFC, maybe.

Wett Blankette: Bo-o-o-o-o-o-o-ring.

Matt R.S. Padd: Why not tell the world were back and ready to kick butt? How does Take That, Naysayers, Inc. sound?

Wett Blankette: Why did I take this job?

John Linen: But we are a U.S. company with strong brand names. Do you know that in England, they call towels cannons? So whats wrong with Americannon?

Towe L. Awf: Seems to limit ourselves to these borders, and we are a global company. Lets just say who we are. Let me toss this out: The Textile Company Formerly Known As Pillowtex, Formerly Known as Fieldcrest Cannon. Well call ourselves The Textile Company, for short.